EUR / USD clings to 1.1800 amid better market mood

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  • EUR / USD extends its decline, after it stopped at 1.1830.
  • Market sentiment improves, the dollar remains weak.
  • ECB: The current political instruments are working.

The EUR/USD it is slowly climbing during the American session, trading 1.1810 up 0.07% on the day at the time of writing. At the beginning of the European session, the single currency recorded a daily high at 1.1831, but withdrew its gains, returning to the 1.1800 zone.

Market sentiment improved, and the major US stock indices rose. The US dollar index continues to weaken across the board, falling 0.14% to 92.53, despite the rise in the yield on 10-year US Treasuries by 1.311%, almost three basis points (bps).

On the European economic agenda, Industrial Production increased by 1.5%, better than the 0.6% forecast.

Regarding the ECB speakers, Isabel Schnabel, Executive Member of the ECB, commented that markets could be overestimating risks to global growth due to the spread of the more contagious Delta variant.

Later, the ECB’s chief economist, Philip Lane, said he is happy that accommodative monetary policy is helping to build core inflation in the euro area, Reuters reported.

The market expects US retail sales.

On the other hand, the Industrial Production of the United States rose 0.4%, a tick lower than the 0.5% predicted by analysts. EUR / USD reaction to the announcement was subdued, while investors await the retail sales revealed on Thursday, forecast at -0.1%, after a 1.1% contraction.

EUR / USD Price Forecast: Technical Outlook

EUR / USD is rising on the daily chart, but the 1.1850 level has limited any bullish movement in the last four sessions. A daily close above the latter could expose 1.1900. On the other hand, a failure of 1.1850 could trigger a downward move, with the 50-day moving average being the first support at 1.1807.

On the 1 hour chart, the EUR / USD has been capped by the confluence of the 50 and 100 simple moving averages, around 1.1813-14. This is a critical level to keep the downtrend intact. Any break to the upside could push the price towards the confluence of the 200 SMA and the September 15 daily high around 1.1833. On the other hand, a break below 1.1800 could expose the September 13 lows around 1.1770.

The Relative Strength Index is at 47.02, aiming higher, but remains below the 50 midline, supporting the bearish bias.

Technical levels

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